One of Richmond’s sons complained to us, in his capacity as executor of his father’s estate, that the bank should have picked up on the large number of transactions made on Richmond’s account (including a significant number of ATM withdrawals), and that it should have become aware of concerns about a third party's influence over Richmond when he made large transactions at a branch. He also complained that the bank failed to take appropriate steps to prevent the loss after being made aware of the family’s concerns in July 2020.

Our investigation

We explained that the bank had no obligation to monitor a customer’s account for unusual patterns of spending. It did, however, have an obligation to act if received sufficient information to place it on notice about the serious possibility that a customer, in this case Richmond, was being defrauded. This was the key question to answer.

We reviewed Richmond’s account activity back to when his sons first expressed concerns that their father was a victim of fraud. We particularly scrutinised the large transactions made at a branch and concluded these transactions did not in themselves constitute grounds for the bank to be concerned about the operation of Richmond’s account, or for it to question whether Richmond was making the withdrawals of his own free will.

However, after reviewing the correspondence by Richmond’s sons with the bank in July 2020, we concluded that the clear and specific nature of their concerns should have led the bank to be on notice about the serious possibility that Richmond’s account was being operated in a way that amounted to fraud.

The bank had previously accepted that it should have been concerned from July 2020 about the way Richmond’s account was being operated. It had offered Richmond’s son, as executor of his father’s estate, $10,000 – $6,000 to cover disputed transactions from July 2020 onwards and $4,000 as compensation for stress and inconvenience. We told his son this was a fair and reasonable offer

Outcome

Richmond’s son accepted the offer.